Question

Credit Card Reconciliation with sub accounts

Forum|Forum|1 year ago
December 11, 2024
1 reply
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In QuickBooks Desktop

My client has a credit card account - A/C 4926, this is the parent account and there are two sub accounts underneath it. In the past the charges have accumulated in the sub accounts and the payment in the master account. This is how it shows on my balance sheet.

A/C 4926

Sub A/C 1 50,000

Sub A/C 2 10,000

4926 Other -47500

Total and correct balance owed is 12,500. On the credit card statement, sub A/C 1 and Sub A/C 2 do not have an ending balance owed. The 12,500 entire liability is reported on card 4926.

I am looking for find a way when i reconcile the parent account that the charges to the sub accounts and the payments on the parent account, get reconciled and report a single balance of 12,500 on the parent account. I cannot find how to apply payments to the sub accounts. I would have to either make a journal entry to move the balance to the parent or when making the payment, do a split transaction and apply the payment to the three accounts (the one parent and two sub accounts).

QuickBooks Desktop

JenoP

QuickBooks Desktop features an intuitive interface that makes setting up and reconciling credit card accounts straightforward, FredCPAstlouis. I'm here to help you understand how to handle the balances and payments of the sub-accounts efficiently.

You're correct that the balances for the sub-accounts will be added or rolled over to the parent account.

This means you don't need to create a journal entry to move the balances of the sub-accounts to the parent. When making a payment, you can enter separate lines to indicate the amount for each sub-account. Here's how:

Go to the Banking menu and select Write Checks.
Select the bank account that you want to use for paying the credit card in the drop-down list for Bank account.
Select the name of your credit card company in the drop-down list for Pay to the order of.
Enter the amount and the date of your payment.
Proceed to the Expenses tab.
Select the parent account in the first line. Then, use separate lines for each sub-account.
Type in the balances of each account. The total amount should be equal to the total amount reflected for the parent account.
Click Save & Close.

More details about tracking credit card transactions are thoroughly discussed in this article: Set up, use, and pay credit card accounts.

When reconciling, you only need to go to the parent account. All transactions, including payments for the sub-accounts, will be listed in the Reconciliation window. Let me share this article as a guide: Reconcile an account in QuickBooks Desktop.

To provide additional support, I'm sharing two helpful resources for troubleshooting reconciliation challenges in case you might need them:

Remember, no question is too small or too complex. Whether you're dealing with reconciliation issues, seeking advice on best practices, or looking for creative ways to streamline your accounting processes, the Community is always here to provide support.

F

FredCPAstlouisAuthor

Thank you Jenop2. I am reading other posts have these follow up questions:

Does the main credit card account get up for bank feeds as well as the sub accounts? or is it only the subaccounts?
Right now I have a credit balance on the sub accounts and the parent.

From what I have read, I should be able to reconcile the parent account and the sub accounts by selecting the parent account in reconcile. I should be able to have one balance carried on the parent card level.

In my chart of accounts the parent account is set up to download banking activity as well as the sub accounts. Should I de-activate the bank feed to the parent

Thank you

M

Mark_AG

Hi there, Fred.

I appreciate your quick response. I'm here to answer all your questions one by one.

To clarify, when you set up bank feeds in QuickBooks, the parent credit card account and the subaccounts can download transactions. You don't need to deactivate the bank feed for the parent account to reconcile both accounts. If you deactivate the bank feed for the parent, you may miss important transactions or balance changes that affect the entire credit card account.

Here's a breakdown of your questions:

Does the Main Credit Card Account Get Set Up for Bank Feeds and the Subaccounts?
- Yes, both the main credit card account (parent) and the subaccounts can be set up for bank feeds in QuickBooks. The parent account will download the entire credit card activity (including charges, payments, credits, etc.), while the subaccounts will download their individual charges or balances. However, remember that the parent account's bank feed will show the total balance of the credit card (combining the subaccounts' balances). In contrast, the subaccounts' feeds will show only the specific charges or credits for each subaccount.
Reconcile the Parent account or Subaccount.
- You can reconcile just the parent account, and QuickBooks will automatically account for the subaccount transactions. This allows you to have a single consolidated balance on the parent account level.

Once the payments are applied and the balances are moved appropriately, you can reconcile the parent account. QuickBooks will carry forward the balance for the parent account, and the subaccounts' balances will be reflected in this reconciliation.

Feel free to check out this article for future reference: Fix issues when reconciling in QuickBooks Desktop.

Let me know if you need further assistance besides reconciling your credit card account in QuickBooks Desktop. We're always here to ensure your business tracks are accurate.

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